European Earnings: Novartis Profit Jumps 10%
Drug maker Novartis reported a better-than-expected rise in first-quarter profit, thanks to strong vaccine sales, while quarterly sales at Nestle also beat expectations.
The Swiss drug maker said first-quarter net profit rose 10 percent to $2.31 billion, with the bottom line also boosted by the weaker dollar.
Novartis, which is digesting a $39 billion deal to buy eye-care company Alcon, on Monday confirmed its full-year forecast for group sales to grow at a mid single-digit percentage rate and drug sales at a low single-digit rate.
Europe's second-largest drugmaker by market value faces the same problems as many of its peers, with earnings growth expected to slow due to the loss of exclusivity on some of its drugs, pricing pressures and more complicated paths to market.
But it benefited from dollar weakness in the first quarter as well as a strong performance from its vaccines unit, where sales rose 21 percent to $280 million. Group sales beat forecasts with a 9 percent rise to $9.91 billion.
Nestle Sales Rise
Nestle sales grew 6 percent to 25.7 billion Swiss francs ($25.30 billion) in the first quarter, as increases in volume and prices helped overcome a drag from the weak dollar.
Organic growth, which strips out currency effects and acquisitions, rose 9.8 percent, beating expectations, while "real internal growth," which primarily measures volume, rose 4.5 percent, Nestle said on Monday in a statement.
The world's largest food company confirmed its growth outlook for 2008, saying it expected organic growth near the same level as 2007 and that it would improve its operating margins.
Analysts had expected sales to rise 5.2 percent to 25.5 billion francs as Nestle uses its brand-name pricing power to pass on higher costs for inputs like flour and cocoa to its wholesale buyers.
Schneider Confirms, Kuehne & Nagel Unsure
French engineering group Schneider reported a 10.7 percent rise in first-quarter sales on Monday and reaffirmed its 2008 financial targets.
Sales rose to 4.311 billion euros ($6.82 billion), with turnover boosted by recent acquisitions.
The company confirmed its 2008 target for organic sales growth of between 6 and 8 percent and for an EBITA (earnings before interest, tax and amortization) margin of 15 percent.
Schneider makes electrical equipment for the construction industry, factories, hospitals and airports.
Meanwhile, Swiss logistics company Kuehne & Nagel posted a forecast-beating 18.5 percent rise in first-quarter net earnings on Monday, but said it was difficult to assess how the economic slowdown would hit the group.
Net earnings rose to 154 million Swiss francs ($151.6 million), ahead of the average estimate of 149 million francs in a Reuters poll of 10 analysts.
And French car maker Renault reported a 4.2 percent rise in first-quarter sales to 10.203 billion euros ($16.18 billion), and maintained its financial targets for the full year 2008.
- Reuters contributed to this report.